Puma Sales Rise 7.3 Percent in Quarter

Activewear firm sticks to earnings guidance for 2011.

PARIS – Citing a positive outlook in spite of tough trading conditions, Puma SE said Tuesday it remains on track to achieve its full-year sales target of 3 billion euros, or $4.08 billion at current exchange rates.


Europe’s second-largest sporting goods firm after Adidas is also sticking to its guidance for a mid-single-digit increase in net earnings this year.


“Puma’s business thus far has proved relatively resistant to the current volatility surrounding not only input prices but also the macro-economic environment in general,” Puma’s chief executive officer Franz Koch told a conference call.


Koch declined to comment on the brand’s outlook for the year 2012, which will see two major sporting events: the UEFA Champions League and the Olympic Games in London, in which sprinter and Puma ambassador Usain Bolt will participate.


Puma has started to test “small synergies” with California action sports brand Volcom Inc., Koch noted. The brand was recently acquired by Puma’s parent company, PPR, with a view to building a mass-market division around Puma that could eventually eclipse its luxury holdings like Gucci.


Certain Puma stores in North America now carry Volcom denim, with certain Volcom stores in the region carrying Puma product. “It’s a first test to see whether the co-branding works under the same roof,” said Koch.


Asia-Pacific and Latin America posted double-digit growth in the third quarter, whereas things proved “a little more challenging” in North America, which is facing tough comps, according to Koch. The brand is under pressure there to up its game in the athletic specialty segment, which compared to competitors’ products “is not resonating as well with U.S. mall consumers,” he said.


Third-quarter net profits were flat year-on-year at 81.7 million euros, or $115.6 million. Figures for third-quarter 2010 were restated due to irregularities with Puma’s joint-venture partner in Greece.


Dollar figures are converted from euros at average exchange rates.


Revenues in the three months ended Sept. 30 rose 7.3 percent to 841.6 million euros, or $1.19 billion, versus 784.3 million euros, or $1.01 billion, in the year-ago period.


Key strategies for the brand include the sharpening of the distinction between its performance and lifestyle categories, which represent roughly 35 and 65 percent of Puma’s business, respectively.


Having announced plans last year to further strengthen its roots in performance, particularly in the soccer category, Puma in the third quarter signed on a trio of soccer stars as global ambassadors: Manchester City’s Sergio Agüero, Atlético Madrid’s Radamel Falcao and FC Barcelona’s Cesc Fàbregas “We now have five out the top twenty players in terms of market value under contract, which underlines our ambition to be the clear number three brand in the world of soccer,” said Koch, adding that the players will sport the brand’s new soccer boot, the Powercat 12, which features the new Puma-patented 3D Duo Power Shooting Technology on the inside of the boot. 


Bolt’s performance at the recent IAAF World Championships in Daegu, South Korea, “significantly” boosted sales of the brand’s running category in the period, notably its lightweight Puma Faas range, which was inspired by Bolt’s hi-tech Puma running shoes, he noted


Koch said Puma’s Women’s Fitness category grew strongly in the quarter, “proving that our renewed focus on the female consumer with concepts such as Puma’s Bodytrain is beginning to pay off.”


Sales in Puma’s sailing category accelerated during the third quarter. Puma, which recently extended its range of outdoor products, will serve as exclusive licensee of event-related merchandise for The Americas Cup Event Authority for the 34th edition of the Americas Cup, which will be staged in 2013 in San Francisco. Puma will operate both the official online and pop-up fan shops in ports hosting the event. The brand will also be partnering with Oracle Racing as the U.S. team’s official sportswear and technical supplier.


Puma has also entered into a new partnership with German soccer club, Borussia Dortmund, effective July 1, 2012. Puma will provide the club’s official kits and serve as its official partner on replica kits, fan gear
and other merchandise.